2009 VCAA Exam

[soldier_on16]

Hey could somebody please explain to me 1.2.1 and 1.2.3?!?

How do they calculate the NRV value?!? For 1.2.1 for the cost price of the Pro Leather exclusive, I got unit sales price as 53 (60-7 [$7=import duty per unit]). They got 55, meaning they decucted the $5 poster... which I thought was a period cost because there are only 90 and you can't attribute it to ALL the balls in stock.

For the stock write down, they got 80 X 10=800... How?

So the main question I'm asking is really why is the poster treated as a product cost for THAT particular line of stock? And Am I right in deducting the import duty to determine NRV? (Because to determine cost price, you add it to the cost of stock)

[MaddehZ]

product cost = get into condition and location, logical per unit blabla

the import duties should be included in the cost of the stock


the $5 posters are considered 'costs incurred in (the stocks) selling marketing or distribution'

so $60 (est selling price) less $5 = $55

the writedown is the dif between the nrv x 80 minus cp x 80

65 x 800 = 5200
55 x 80 = 4400

writedown of $800

[soldier_on16]

"Each ball sold comes with a signed poster of the Australian netball team. This costs the business $5 per
poster. At 31 December 2010 there were 90 posters on hand. Posters are purchased as required."- I found it quite misleading because they didn't have enough posters on hand for ALL the balls, and they bought it when required, so I thought period cost... But okay fair enough.

[soldier_on16]

Just out of curiosity, with the other stock items, would you still still subtract $5 for each poster on their selling prices? Or does it only apply to the stock which you are applying NRV to?

[Saur11]

Well NRV is only used when it is the lower of cost. SO, yes, you would subtract the 5 however it makes no difference since their cost prices are still lower then their NRVs